How do I file for bankruptcy on credit card debt?

You can file for bankruptcy for credit card debt by first completing a credit counseling course and a means test, then filling out a bankruptcy petition. You’ll then file the petition, along with several documents that detail your financial situation, with the bankruptcy court in your judicial district. Filing will require you to pay certain fees, as well.

After filing your petition, you will need to attend a meeting with your trustee and all your creditors, commonly called a 341 meeting. An objection period of 60-90 days begins after the meeting, and your credit card debt will likely be discharged after that.

This is the process for Chapter 7 bankruptcy, which is the most common type. The bankruptcy process is slightly different depending on which chapter you file. For example, debt discharge happens much more quickly in Chapter 7 versus Chapter 13, and Chapter 13 will require you to pay back more of your other debts on a payment plan. Keep in mind that your credit card accounts will likely be closed when you file for bankruptcy

How to File for Bankruptcy for Credit Card Debt

1. Take the means test.

   Take the means test to determine whether you qualify for Chapter 7. If you don’t, you’ll need to file Chapter 13 or another type.

2. Complete a credit counseling course and seek legal counsel.

   Complete an approved credit counseling course, hire a bankruptcy attorney if you desire, and fill out your bankruptcy petition, along with other required documents. These documents detail your income and expenses, assets and liabilities, and any current contracts and leases. You’ll also need to include a statement of financial affairs and a list of exempt property if you have any.

   
   

   In addition, provide your assigned trustee copies of your most recent tax return and any returns filed during the case. If you’re filing for Chapter 13, you’ll need to write a payment plan proposal, too.

3. File your petition and attend your 341 meeting.

   Once you’ve obtained copies of official bankruptcy forms – by downloading them from the U.S. Courts website or your local court’s website – you can fill them out, file your bankruptcy petition with the bankruptcy court in your judicial district, and pay any fees due at the time. The bankruptcy clerk’s office will notify your creditors when you’ve filed for bankruptcy.

   
   

   In 21-60 days after filing, a 341 meeting will be held with the U.S. Trustee representative, your appointed case trustee, and your creditors. You’ll be expected to answer questions about your financial status at the meeting.

4. Wait 60-90 days, or begin making payments according to your payment plan.

   If you’re filing Chapter 7, your creditors will have 60-90 days after your 341 meeting to object to your Chapter 7 case. Generally, after you file for bankruptcy, collection efforts on debts you listed in your petition will stop. If you have balances on any exempt secured property, such as a home or vehicle, you’ll need to continue to make payments on those debts. Also, you are still liable for non-dischargeable debts, such as alimony and child support, among others.

   
   

   If you’re filing Chapter 13, you’ll need to start making payments within 30 days of filing, even if your plan hasn’t been approved yet. Your 341 meeting may happen before your payments begin, though the meeting can happen up to 60 days after you file, so you may be making payments before the 341 meeting. Then, attend your confirmation hearing to find out if your plan has been approved or needs adjustment. Once the court approves the payment plan, your trustee begins to distribute your payments to the appropriate creditors.

5. Wait to have your debts discharged by the court, or finish your payment plan.

   Chapter 7 bankruptcy debt will usually be discharged when the objection period ends. For Chapter 13, you’ll need to complete all the payments on your payment plan before your remaining debt is discharged, which usually takes 3 to 5 years.

To learn more, check out WalletHub’s guide to bankruptcy.